Saturday, May 28, 2011

Cui Bono?

I wonder if the Republicans who are pushing against raising the debt ceiling might have been talking to bond traders who are short Treasuries or long interest rates.

Several members of Congress have been told by unnamed "traders and economists" that default wouldn't be that bad a thing. These unnamed traders could, I suppose, be imbeciles. That's within the realm of the possible. The other, more creepy and more interesting alternative, is that they're not imbeciles, they're someone with a big position that will pay off if interest rates skyrocket. I can think of four or five ways off the top of my head that would give a handsome return to anyone betting against the house.

I have no evidence that this is the case, mind you, but if the Republicans don't back down on the debt ceiling (either on bad advice or any other reason), this country's in for a world of hurt. If Wall Street isn't telling them in no uncertain terms not to push this too far, we're really screwed.

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